Taxes

[Ahickmanjr]

Hey! I was thinking about working in Iowa but I live in Nebraska and wanted to file exempt. If I file exempt, when tax season comes back around am I required to still file for taxes?

[xmasbaby0]

 If you have income above the federal filing threshold, you will have to file a federal tax return.   You are also subject to paying tax to the state that you live in which is Nebraska.   If you work in Iowa, you will have to file a NON-resident return for Iowa.  When there are two states--you prepare the non-resident return first and then the return for the state you live in.

[BillM223]

Normally, "file exempt" means "exempt from withholding" which is possible in certain circumstances. Please read this TurboTax blog entry ''Can I File Exempt & Still Get a Tax Refund?"

Also note that you generally pay taxes in the state where you live AND in the state(s) where you work. So, as xmasbaby0 says, you would file a non-resident return for Iowa and a resident return for Nebraska.

The issue of double taxation is usually solved by one state giving you a credit for all taxes paid to another state on the same income.

Filing exempt does not excuse you from filing at all.